Which of the following is analysed in the "Common size statement analysis of a company"?

A) Common size balance sheet
B) Common size income statement
C) Horizontal analysis
D) Vertical analysis

Choose the correct answer from the options given below.

AB

The correct answer is option 1- AB.

Common Size Statements (Vertical Analysis): In this approach, each item on the financial statement is expressed as a percentage of a common base, typically a key figure such as total revenue or total assets. By using percentages, it becomes easier to compare the relative proportions of different items within a single period or between different companies. There are two types of common size statements- common size income statement and common size balance sheet.

* Vertical analysis is another name for the analysis made through the common size statements.

Vertical Analysis is not something that is analysed in a Common Size Statement; rather, it is the method or technique used to perform the Common Size Statement analysis. The question specifically asks what is analysed, not which method is used. That’s why only the Common Size Balance Sheet and Income Statement (Options A and B) are included in the correct answer.